June 15, 2011

If Obama Can't Get A Tax Cut, He Has An Issue

In a briefing with reporters in the Capitol Tuesday, the House and Senate GOP conference chairs said they're through with short-term stimulus measures, even if they take the form of tax cuts.

"Well they've tried this once, and it hasn't seemed to be working," said Rep. Jeb Hensarling (R-TX).

His Senate counterpart, Lamar Alexander (R-TN) echoed this view.

"We don't need short-term gestures, we need long-term strategies that build into our system simpler taxes, lower taxes, fewer mandates, lower costs, more certainty, any changes in the debt structure of tax reform ought to come out of the Vice President's talks or part of a major tax reform," Alexander said. "If short-term government programs work, we wouldn't have 9% unemployment today because the government has tried it. So we've proved that doesn't work, unforutnately."

The best case scenario for Obama is to pass this tax cut. The next best case scenario is to use it as an issue against Republicans. Selling Keynesian fiscal stimulus is hard. But selling tax cuts, especially when you're a Democrat, is easy. Obama can use the issue to burnish his centrist credentials and paint the Republicans as obstructionist.